5 Stocks Triggering Breakout Trades - views

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

WGL Holdings (WGL) sells and delivers natural gas and provides a variety of energy-related products and services to customers mainly in the District of Columbia and the surrounding metropolitan areas in Maryland and Virginia. This stock closed up 1.3% to $45.67 in Friday's trading session.

From a technical perspective, WGL trended modestly higher here right above some near-term support at $44.50 with heavy upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $40.76 to its intraday high of $45.78. During that move, shares of WGL have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of WGL within range of triggering a near-term breakout trade. That trade will hit if WGL manages to take out $45.78 to its 52-week high at $46.22 with high volume.

Traders should now look for long-biased trades in WGL as long as it's trending above some near-term support levels at $45 or $44.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 209,638 shares. If that breakout hits soon, then WGL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55.

Keep in mind that WGL is set to report earnings on Aug. 7 after the market close. Look to play the upside ahead of the quarter and then after if the stock reacts positively to earnings.

Exact Sciences

Exact Sciences (EXAS) is a molecular diagnostics company whose activities include early detection and prevention of colorectal cancer. This stock closed up 5.3% to $14.47 in Friday's trading session.

From a technical perspective, EXAS jumped higher here right above some near-term support at $13 with heavy upside volume. This stock has been uptrending very strong for the last two months and change, with shares moving higher from its low of $6.93 to its recent high of $14.70. During that move, shares of EXAS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EXAS within range of triggering a major breakout trade. That trade will hit if EXAS manages to take out its 52-week high at $14.70 with high volume.

Traders should now look for long-biased trades in EXAS as long as it's trending above some near-term support at $13 or above its 50-day at $12.40 and then once it sustains a move or close above its 52-week high at $14.70 with volume that hits near or above 1.39 million shares. If that breakout hits soon, then EXAS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $20.

Keep in mind that EXAS is set to report earnings on July 23 before the market opens. Don't look for big upside off this potential breakout until after the market has digested the earnings and the stock remains in its uptrend.

Whirlpool

Whirlpool (WHR) is a manufacturer and marketer of home appliances. This stock closed up 7.9% at $128.91 in Friday's trading session.

From a technical perspective, WHR gapped sharply higher here back above its 50-day moving average of $123.25 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $107.88 to its intraday high of $129.99. During that move, shares of WHR have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of WHR within range of triggering a major breakout trade. That trade will hit if WHR manages to take out some near-term overhead resistance levels at $131.59 to its 52-week high at $134.09 with high volume.

Traders should now look for long-biased trades in WHR as long as it's trending above $125 or $124 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.03 million shares. If that breakout triggers soon, then WHR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $150 to $160.

Hologic

Hologic (HOLX is a developer, manufacturer and supplier of medical imaging systems and diagnostic and surgical products focused on the healthcare needs of women. This stock closed up 8.5% at $21.67 in Friday's trading session.

Friday's Volume: 12.33 million

Three-Month Average Volume: 3.45 million

Volume % Change: 298%

Shares of HOLX ripped higher on Friday after the company said its former chief executive Jack Cumming will return to be the CEO and undertake a review of its businesses, after its current CEO stepped down from personal reasons.

From a technical perspective, HOLX gapped sharply higher here back above both its 50-day and 200-day moving average with heavy upside volume. This move has taken shares of HOLX out of its recent downtrend that saw the stock drop from $22.23 to its low of $18.45. Shares of HOLX are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if HOLX manages to take out some near-term overhead resistance levels at $22.23 to $22.97 with high volume.

Traders should now look for long-biased trades in HOLX as long as it's trending above its 200-day at $21.03 or its 50-day at $20.39 and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.45 million shares. If that breakout triggers soon, then HOLX will set up to re-test or possibly take out its 52-week high at $23.96. Any high-volume move above that level will then give HOLX a chance to tag $25 to $27.

Keep in mind that HOLX is set to report earnings on Aug. 5 after the market close. I would target those first resistance levels ahead of the quarter and then a possible run above its 52-week high after the quarter if the markets likes the numbers.

From a technical perspective, CSL trended modestly higher here right off its 50-day moving average of $65.17 with above-average volume. This move is quickly pushing shares of CSL within range of triggering a near-term breakout trade. That trade will hit if CSL manages to take out some near-term overhead resistance levels at $67.68 to $68.12 with high volume.

Traders should now look for long-biased trades in CSL as long as it's trending above its 50-day at $65.17 and then once it sustains a move or close above those breakout levels with volume that's near or above 352,656 shares. If that breakout hits soon, then CSL will set up to re-test or possibly take out its 52-week high at $70.55. Any high-volume move above $70.55 will then give CSL a chance to tag $75 to $80.

Keep in mind that CSL is set to report earnings on July 23 before the market open. Look to play these breakout levels after the quarter, since we need to see how the stock reacts to the numbers first.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.